the engineering issues requiring further evaluation of feasibility, environmental considerations, and the management and institutional issues. We believe that we are working toward the successful balancing of many important factors related to this range of issues. Accordingly, we are proposing to take the Ocean Margin Drilling Project to the next phase of its consideration -- the detailed engineering and operational assessments and technology development studies of riser technology and the ship modification. We will also commence geophysical surveys of prospective drilling sites, and, geophysical survey work will continue throughout the proposed program. Funds for the government's part of this next phase are included in the budget of the National Science Foundation for fiscal year 1981. We have reached an agreement with a number of oil companies to cost share in the next phase of the program. I know that there are many elements of the Ocean Margin Drilling Program that are of interest to this Subcommittee and hope that the hearings will effectively address these. The program, as it is now planned, has a number of unique features. Accordingly, I will concentrate most of my remarks on several points where the particular perspective of the Executive Office may be of help in understanding the nature of the proposed program and decisions that have thus far been made. I will discuss: the rationale for and the nature of the agreement with the oil companies that have indicated an interest in participation; Federal budgetary and management considerations including those that resulted in centralizing Federal responsibility at the National Science Foundation; international participation; relation of the Ocean Margin Drilling Program to resource evaluation; and, the costs and benefits of the program. I will conclude with a brief comment on the next steps as we see them. Industry-Government Agreement The government, through the discussions led by Drs. Press, Hackerman, Atkinson, and Pimentel, has reached an agreement in principle to share with industry the cost of the first phase and hopefully the overall costs of the Ocean Margin Drilling Program over the next 10 years. While there are several provisions of agreement to be concluded, for example in the matter of liability, a substantial framework of agreement has been developed. This forms the basis for the continuing discussion between the government and the industry participants. Key features of the agreement are: Cost sharing. The participating companies will share the total Back-away Provisions. Because the Ocean Margin Drilling Program involves substantial new engineering design and construction, prudent plans for periodic reassessment, back-away, and recommitment to the subsequent phases of the Ocean Margin Drilling Program are included. Participation in the Scientific and Technical Planning. Industry scientists, engineers, and executives will participate in the scientific planning, technical reviews and the overall advisory review of the program, including the Advisory Committee that will be established by the National Science Foundation Director. In addition, the participating companies will have an industry oversight committee that will provide them a forum for reviewing their own participation in the Ocean Margin Drilling. Rights to Data and Technology. As a basic research program, results The Administration believes this agreement to be consistent with its overall research and development policy, and it is consistent with antitrust policy. Because cost sharing of basic research between government and an industrial sector is one of the novel features of the Ocean Margin Drilling Program as it is now planned, it is important for the Subcommittee to understand with some precision the Administration viewpoint on cost-sharing in an endeavor of this kind. Let me try to explain it. The program is one of basic research and advanced technology development. Support of basic research and advanced technology development have become natural and widely accepted roles for the government. As this Subcommittee knows it is often difficult to forecast beforehand in what, if any, ways the results of basic research or expensive, risky, but potentially significant, advanced technology will be useful. Even though the oil industry has quite advanced technology, the project under discussion represents a long-term investment. And, if a project or a program of work such as the Ocean Margin Drilling Program is successful, the knowledge generated will be exploited widely. Due to these inherent characteristics, basic research and advanced technology development is often not adequately supported by the private sector. Hence, it is appropriate for government to assume a role. As such, Federal support of the Ocean Margin Drilling Program parallels the strategy of basic research support that has been followed in many large national programs as well as in the more general support of basic research by the Federal Departments and agencies. On the other hand, the proposed program, through basic research, has particular prospective usefulness to a major industrial sector of our economy. Our current and very incomplete knowledge of the ocean margin region suggests that large hydrocarbon deposits might well be found there. Although the proposed program is not intended to explore for hydrocarbons or even produce a resource assessment, it will help provide a geologic framework for later hydrocarbon resource assessment in this region. Such information will be extremely useful for the long-term planning on the part of oil companies. The advanced ocean drilling technology to be developed in the Ocean Margin Drilling Program will also have long-run usefulness to the nation's oil companies. It is therefore reasonable to seek a cost-sharing partnership between the government and those organizations in the oil industry that wish to share in this research enterprise. At every step of our discussions with the oil companies and in the evolution of the planning within the government, the Office of Science and Technology Policy has had the benefit of advice on this proposed program from the Antitrust Division of the Department of Justice. The proposed program is consistent with antitrust law, and the Department's view concerning cooperation in research by an industrial sector. The Assistant Attorney General for Antitrust is rendering a formal opinion that will document the Department's views for the public record and for the participating industry firms. This cost-sharing approach to research having particular interest in a given industrial sector is one that the Administration hopes to explore further. In another area, research related to automotive technology, a somewhat analogous plan is being developed for initiation in fiscal year 1981. We seek the understanding and encouragement of the Congress in these innovative approaches to research and development. Budget and Management Considerations Beyond the policy considerations concerning cooperation with industry on large-scale scientific projects such as those that I have just outlined, the Administration has been very interested in pursuing a cost-sharing arrangement with industry for important fiscal reasons. Given the overall constraints in the budget, including those facing the Departments and agencies funding research and development, there was a very limited prospect that the Ocean Margin Drilling Program could go forward in the near future in the next two to three budget years -- without some sharing of the costs between the public and the private sectors or with other countries. In our planning with the Departments and agencies, with the academic community, and with the industry, we have been very clear about these budget constraints. Thus, we have hoped that by sharing the costs of this endeavor with a sector of American industry that has a mutual interest in and responsibility for basic and applied research and technology development, we could advance by some years activity of mutual interest to industry, government, and the academic community -- a project that is, in short, in the national interest. This committee and the others in the Congress must understand that the alternative of full funding by the Federal government of the Ocean Margin Drilling Program is not a realistic one. Nor should it be assumed that the current program with the Glomar Challenger would, as an alternative, have long-life in the 1980's. The arrangements that are being worked out with industry are to be encouraged if the Ocean Margin Drilling Program is to proceed soon. A second feature of the budgeting for this endeavor relates to the National Science Foundation itself. We in the Office of Science and Technology Policy and our colleagues in the Office of Management and Budget are quite well aware of and supportive of the need to rationalize the relationships between large-scale, long-term national scientific enterprises and the general support by the Foundation of basic scientific research across all disciplines which is itself in the national interest. We support the policies of the Director and the National Science Board regarding "big science" projects and view the Ocean Margin Drilling Program as a project that must be considered in its own right, in the national interest, independent of the support of the disciplines and the larger-scale science projects that could be considered a part of the "base" or "new starts" within the National Science Foundation's general fiscal plan. The funds for fiscal year 1981 therefore that are allocated to the National Science Foundation in the President's budget proposal for fiscal year 1981 were "new funds" above what would have otherwise been provided for the National Science Foundation or what might have been provided for research and development in general. Hence, in the overall budget review by the Office of Management and Budget in which the Office of Science and Technology Policy participated, the Ocean Margin Drilling Program was evaluated against a wide range of government research and development projects and other Federal initiatives. The President's approval places the project in the national program category. It will be evaluated as it proceeds, in this way, and not viewed as an alternative to other support of research in the earth and ocean sciences. Nor will it be competed against the overall budget for the Foundation. On the other hand, if the technical and cost elements continue to be favorable, we would expect continuing commitment to the Ocean Margin Drilling Program by the Administration. Another important consideration of the Administration that is of interest to this Subcommittee was the question of either centralizing the project and funding it at one Department or agency or, alternatively, spreading the funding -- and inherently the management as well -- among two or more Departments and agencies. This research project is of great interest to the Departments of Energy and Interior. Over the course of the summer and autumn of 1979, we considered the advantages and disadvantages of involving all three or some combination of these three agencies and discussed the project at length with all three. The advantage of multiagency budgeting lies in part in the illusion created by decentralized Federal budgeting -- that somehow the project may appear to "cost" less, and might seem more "relevant" if its support is spread among a diversity of agencies. The principal case for "relevancy" lies in the relationship of the Ocean Margin Drilling Program to resource evaluation, which I will address shortly. Multi-agency budgeting is offset by these considerations: desirability of a single focal point within the Executive branch for the monitoring of budget and program management for a program with this degree of operational content, and, secondly, management of budget requests in the Congressional budget process. Within the Executive, the designation of a single agency for budget and management has distinct advantages of accountability where an enterprise of this magnitude and operational complexity is comtemplated. We believe the same considerations also apply to the Congressional process. 1/ See, for example, National Science Board paper, NSB 79-65, Jan. 19, 1979. Given a preference for centralizing the budget for the Ocean Margin Drilling program in one agency, the question then arises as to why it should be the National Science Foundation. The reasons are twofold. First, it is basic research and, second, the NSF has a management capability and commitment to undertake the effort. The Deep Sea Drilling Project, the academic oceanographic fleet, the Antarctic Program, large telescopes, and other science initiatives involving construction and operation, all proceed with a high degree of success under the sponsorship of the National Science Foundation. One recent, outstanding example is the completion of the Very Large Array radio telescope which has been achieved on time and within the budget. The Executive Office finds the National Science Foundation to be a quite suitable locale for a national project of basic research and technological development such as the Ocean Margin Drilling Program. All of these factors were discussed as we reviewed the budget alternatives for the Ocean Margin Drilling Program. During the course of the fiscal year 1981 budget review, the President received a letter from the Chairman of the Subcommittee of the House Committee on Appropriations for HUD and the Independent Agencies. Mr. Boland's views were very helpful to us as we were considering issues such as the ones I have been addressing. I attach Mr. Boland's letter to my statement and ask that it be included along with it as a part of the record. To summarize, let me reiterate that the Ocean Margin Drilling Program is viewed as a Presidentially-endorsed initiative in basic research that will extend over a decade or longer. It will be considered in its own right, as a national project, budgeted as such, with funding and management centralized at the National Science Foundation because that agency is a principal sponsor of basic research and a manager for the government of large-scale national basic research programs. We hope it will proceed on the basis of cost-sharing with an industrial sector with natural research and engineering interests in the project. International Participation A feature of the current Deep Sea Drilling Project being supported by the National Science Foundation has been a gradual but successful increase in international financial support for the project over the last five years. Discussions are underway with the governments of several countries that have participated in the Glomar Challenger program about the possibility of participation in the new project. Because of the greater expense of the Ocean Margin Drilling Program, such participation would necessarily involve a higher level of financial contribution than has been the case in the Deep Sea Drilling Program. In his message on science and technology to the Congress delivered in the first session of the 96th Congress, the President presented a framework for enlarging international cooperation in projects of basic and applied research and development. The President cited several..themes that have shaped the Administration's policy, including "pursuing new international initiatives that advance our own research and development objectives." The President noted that as the cost of large-scale research |